Overall Equipment Effectiveness (OEE) is a central KPI that is used for calculating and analyzing the productivity of a production plant. This KPI also takes account of losses that may occur during the manufacturing operation and have an impact on production. OEE is defined as the result of the following factors:
- Performance rate
- Availability rate
- Quality rate
The value range is between 0 and 1.
In the beginning, OEE was used only in the area of Total Productive Maintenance (TPM), but by now it is an essential tool for other operational improvement methods, such as Six Sigma. OEE measures the entire range of efficiency losses for production plants and shows which machine or process-induced losses must be reduced. Calculating the OEE requires data of the relevant machine. This data can be recorded manually or directly taken from the machine. The result is a collection of data based on which time periods, for example a quarter, can be evaluated in detail. The strength of OEE is systematic identification, analysis, and reduction of all losses in the production process. OEE-based analysis and assessment of production plant productivity is the foundation of further implementation of product-relevant concepts according to the principles of Lean Management. The disadvantage of OEE is its difficult implementation as it requires extensive staff training.
A more general form of Overall Equipment Effectiveness exists, which is called Overall Process Effectiveness (OPE). This method can be used in a variety of industries for the purpose of achieving process optimization. In my next article I will explain how Overall Process Effectiveness can be used in ARIS.
